The correlation between real yields and gold price is well known, has strengthened since 2018 and in many ways works a lot better than e.g. the one with the M2 Money Stock. The (speculative) overshoot in gold in August 2020, very much like the one in August 2011 has corrected.
Assuming the correlation remains strong, further price action in gold will depend on where real yields go. After the GFC real yields reached -1.67%. Considering the largest portion of bankruptcies of this recession is yet to come and seeing that real yields during the aftermath of the GFC occurred in Sep 2012, almost five years after it started, combined with record debts mandating low yields and low inflation expectations, I suspect in the coming years real yields will go lower and barring attractive investment opportunities gold still higher.
NB: In 2012 gold could not achieve another record high despite lower real yields. The high from 2011 remained the record high until this year.
Silver is included for comparison, it is not far off the mark.
Assuming the correlation remains strong, further price action in gold will depend on where real yields go. After the GFC real yields reached -1.67%. Considering the largest portion of bankruptcies of this recession is yet to come and seeing that real yields during the aftermath of the GFC occurred in Sep 2012, almost five years after it started, combined with record debts mandating low yields and low inflation expectations, I suspect in the coming years real yields will go lower and barring attractive investment opportunities gold still higher.
NB: In 2012 gold could not achieve another record high despite lower real yields. The high from 2011 remained the record high until this year.
Silver is included for comparison, it is not far off the mark.